Air Berlin PLC l Zurich 13 December 2013 Roadshow Commerzbank

Transcription

1 Air Berlin PLC l Zurich 13 December 2013 Roadshow Commerzbank

2 Agenda A. Key investment highlights 3 B. Financial overview 15 C. Conclusion 25 2

3 airberlin key facts Market position as of 30 September 2013 Berlin No. 2 in core market: Germany / Austria / Switzerland Dusseldorf No. 7 in Europe with 33.3m guests in 2012 Network carrier focused on business & leisure travellers 147 destinations served 145 aircraft at average age of 5 years Hubs: Berlin, Dusseldorf 80% of airberlin guests on European routes, on the short- and medium haul network 2012 group revenue of EUR 4.31 billion EBIT of EUR 70.2 million in 2012 an improvement of more than EUR 300 million over the previous year Earnings improvement achieved in Shape & Size program of approx. EUR 250 million contributed to a return to net profit in 2012 of EUR 6.8 million After the first nine months and due to the continuing price weakness, the Company should now only be able to come close to achieving market consensus in 2013 with positive one-off effects and higher other operating income. This is currently being pursued. Key codeshare/strategic partner and alliances: 3

4 airberlin has successfully developed into a full service airline Air Berlin Inc. was founded by the former PanAm captain Kim Lundgren in Oregon, USA in Air Berlin GmbH & Co. Luftverkehrs KG was founded with Joachim Hunold as sole managing director Since 2011 Chartercarrier Mallorca/Euro-Shuttle Scheduled services Alliances & partnerships Charter-flights from Germany PAX [million] Foundation Business focus: Charter Start of Mallorca and City Shuttle Organic growth Scheduled traffic specializing on holiday destinations IPO in 2006 Consolidator of DACH airline industry (Acquisitions of LTU, Deutsche BA and Niki) Codeshare with many airlines worldwide Strategic partnership with Etihad Airways since 2012 Since March 3 rd 2012 airberlin member in the oneworld alliance Closure of less important routes International positioning Alliances & codeshares Rationalisation of route network 4

5 Customer Service airberlin strategic development transformation process HYBRID CARRIER FULL SERVICE AIRLINE BUSINESS LOW COST LEISURE Independent airline (cooperation with NIKI) Global network (from America to Asia) Alliance member Global positioned frequent flyer program (topbonus) Full-Service Airline (lounges, priorities, etc.) Timeline 5

6 Management Board airberlin group Wolfgang Prock- Schauer Chief Executive Officer (CEO) Ulf Hüttmeyer Chief Financial Officer (CFO) Helmut Himmelreich Chief Operating Officer (COO) Dr Martina Niemann Chief Human Resources Officer (CHO) 6

7 Board of Directors Air Berlin PLC Dr Hans-Joachim Körber Chairman Board of Directors, Chairman Nominations Committee, Member Remuneration Committee, Finance Committee James Hogan CEO Etihad Airways, Vice Chairman Board of Directors, Member Nominations Committee Wolfgang Prock- Schauer Chief Executive Officer (CEO) Joachim Hunold Former CEO Air Berlin PLC, Member Board of Directors Andries B. van Luijk Former Executive Vice- President Passenger Sales and Services and Chairman KLM-NWA Joint Venture, Member Board of Directors James Rigney CFO Etihad Airways, Member Board of Directors, Member Finance Committee Ali Sabanci Member Board of ESAS Holding and Chairman Pegasus Airlines, Member Board of Directors, Finance Committee Heinz-Peter Schlüter Chairman Supervisory Board of Trimet Aluminium AG, Essen, Member Board of Directors, Chairman Audit and Remuneration Committee, Member Nominations Committee Dr Lothar Steinebach Former CFO Henkel AG, Member Board of Directors Nicholas Teller CEO E.R. Capital Holding GmbH & Cie. KG, Hamburg, Member Board of Directors, Chairman Finance Committee, Member Audit, Nominations and Remuneration Committee Johannes Zurnieden Managing Director Phoenix Reisen GmbH, Bonn, Former Chairman Board of Directors, Member Board of Directors, Nomination and Remuneration Committee 7

8 Lufthansa airberlin Selected outbound/inbound 2013E Lufthansa airberlin Condor Germania Selected intra-germany 2013E routes A leading airline in core markets of Germany, Switzerland and Austria (DACH), particularly in key routes 2012 Total PAX (million) (1) % Approx. 6.0 Approx. 1.0 Route Munich Dusseldorf Berlin-Tegel Munich Munich Hamburg Munich Cologne-Bonn Berlin-Tegel Stuttgart Berlin-Tegel Dusseldorf Berlin-Tegel Cologne-Bonn Frankfurt Berlin-Tegel Dusseldorf Palma de Mallorca airberlin route capacity (Capacity in thousand seats) airberlin share 42% 39% 35% 38% 52% 51% 55% 19% 64% Market position Leader in key Routes 2012 seat load factor (2) 78.8% Cologne-Bonn Palma de Mallorca Dusseldorf Vienna Berlin-Tegel Zurich Berlin-Tegel Vienna Dusseldorf Zurich % 54% 44% 56% 52% airberlin focuses on operational performance and being a leader in its key passenger routes Source: Diio Mi and respective company information (1) SWISS, Austrian Airlines and Germanwings PAX removed from Lufthansa PAX numbers (2) Seat load factor defined as the ratio of RPK to ASK Lufthansa load factor for Passenger Airline Group, including Germanwings and regional partners 8

9 Unique financial and strategic partnership with Etihad Airways Hub to Germany and Europe Chicago New York Dusseldorf Frankfurt Berlin Munich Beijing Los Angeles Fort Myers Miami Abu Dhabi Bangkok Phuket Destinations operated by airberlin Destinations operated by Etihad Airways Gateway to Middle East, Australia & Africa Sydney Joint strategic network approach Portfolio of almost 100 routes 67 AB/HG routes carry the EY code 32 EY routes carry the AB code By combining both airlines flight networks, the number of available flights increased to 227 destinations in 83 countries Codesharing and interlining multiplies number of destinations offered vs. many European and DACH peers 9

10 Unique financial and strategic partnership with Etihad Airways Comprehensive partnership with Etihad Airways Shareholder loan granted by Etihad Airways up to a total amount of US$ 205 million Participated pro-rata to shareholding in EUR 140 million convertible bond offering in Q Etihad Airways is codeshare partner No.1 for airberlin Portfolio of almost 100 codeshare routes More than EUR 100 million (US$ 130 million) revenues generated in total to EY & AB in 2012 Latest extension: Codeshares to China & Japan Due to hub development, codeshare opportunities will further grow Development of codeshare agreements with Etihad Airways partner airlines Synergies along entire value chain Sales Financing Common Guests development 2012 Q [ 000] Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Operations Products Growing codeshare opportunities will enable growing booking numbers and synergies 10

11 Beneficiary of oneworld membership Destinations Codeshare destinations (excluding EY operated routes) Los Angeles Chicago New York Oslo London Paris Rome Madrid Helsinki Moscow Berlin Bucharest Irkutsk Beijing Hawaii Fort Myers Miami Curacao Abu Dhabi Phuket 223 Jan-Sep 12 Common codeshare bookings with oneworld +111% 471 Jan-Sep 13 FY 2013 [as of Oct] oneworld membership makes airberlin well positioned in core European market and globally Connectivity drives additional revenue opportunities and fosters passenger loyalty 310 FY From Jan-Sep codeshare bookings more than doubled compared to last year s period Impressive growth rate from Jan-Sep is expected to be continued mainly with partnerships with American Airlines, S7, Finnair and IAG 11

12 Codeshare agreements with 16 airlines Etihad Airways is codeshare partner no. 1 for airberlin 50 m in additional AB-revenues more than 100 m revenues in total to EY & AB in 2012 Portfolio of almost 100 codeshare routes Partnerships with Etihad Airways equity alliance members: Codeshare agreements with Virgin Australia, Air Seychelles and Air SERBIA Over one year of membership in the oneworld alliance More than 300,000 guests on joint routes in 2012 Codeshare agreements with 7 oneworld partners Almost 900 destinations in 150 countries Other partners 8 "equity alliance" carrier with codeshare agreements Airberlin has codeshare agreements with several airlines to expand its international route network airberlin s business model focuses on business and leisure travellers; oneworld alliance and strategic partnerships increase global connectivity 12

13 Key drivers of Turbine Lean & smart Stakeholder negotiations Cum. benefits (illustrative) Proven track record of successfully implementing improvement measures Turbine provided EUR 200 million in 2013, of which 100% are secured Target ~ EUR 400 million EUR 200 million 2013 Q1 Q2 Q3 Q Q1 Q2 Q3 Q4 1 Internal: highly efficient organisation & processes External: highly regarded by customer 2 Bring major stakeholder relationships in line with market best practice LEAN Optimise operations Efficient structures and workflows Cost reduction Network & Fleet Commercial Product / Service Operation SMART Focus on key markets Touristic and business segments Customer needs Brand values Airport & ground handling Lessors & OEMs Labour and overhead TOP & distributors Wet lease providers Maintenance suppliers airberlin has a clearly defined plan to further improvements and cost reductions and has already exceeded forecast cost reductions under Turbine to date 13

14 Agenda A. Key investment highlights 3 B. Financial overview 15 C. Conclusion 25 14

15 Management summary Key highlights in Q Topline development was satisfactory: Capacity is down by 5.8% (seats) and 3.9% (ASK) Load factor down by 0.4%pts. due to weaker passenger numbers (-5.6%) Revenue per ASK improved by 0.5% Turbine was delivered EUR 200m are secured for full year Cost per ASK (excluding fuel) are nearly on last year s level although this year s quarter was impacted by the increase in non-influence able cost items, i.e. navigation fee and airport charges. EBIT compared to previous year s quarter increased by 14.2% but not in line with expectations due to less demand. After the first nine months and due to the continuing price weakness, the Company should now only be able to come close to achieving market consensus in 2013 with positive one-off effects and higher other operating income. This is currently being pursued. 15

16 3 rd quarter financial performance [ m] Q3/12 Q3/13 actual Revenue EBITDAR EBIT Net result Total revenue decreased by 3%, however against 6% less seats, the revenue quality improved. 1, % 1,346.3 EBITDAR increased by 3%. EBIT improved by 14% due to better operational performance and less cost of ownership. Net result has decreased due to higher net financing costs driven by FX and derivatives valuation (based on restated net result) +3% % % ) +52% 1) Q as reported 16

17 3 rd quarter operational development Q3/12 Q3/13 Capacity seats [m] Guests [m] Load factor [%] -0.4%p % % ASK [bn] Yield incl. a/p tax rev. & aviation tax [ ] Total Revenue [ m] -3.5% -3.9% % , ,

18 3 rd quarter operational development Q3/12 Q3/13 Q3 revenue 1) per ASK [ c] Q3 cost 2) per ASK excl. fuel [ ct] +0.5% % 5.27 Airport charges Air transportation tax Q3 cost 2) per ASK incl. fuel [ c] Leasing & depreciation Navigation Personnel % Other ) Total revenue 2) Cost on EBIT level excluding other operating result 18

19 Development of expenses Turbine effects are offset by cost increases mainly of airport & navigation charges Q Q Δ Q3/13 vs Q3/12 [EURm] [EURm] [EURm] [ %] Expenses for materials and services ,6% Fuel ,7% A/P and handling charges ,4% Operating leases ,5% Navigation ,4% Air transportation tax ,8% Catering costs ,5% Other ,0% DOCs declined in line with capacity reduction and benefit from lower fuel price Handling charges also in line with capacity reduction only due to Turbine as charges in general increased, especially in Spain Catering cost increased structurally due to more long-haul passengers Personnel expenses ,7% Salary increases were offset by less FTE and higher productivity Other operation expenses ,1% Technical cost ,8% IT ,1% Advertising ,3% Sales & distribution ,2% Insurance ,5% Other ,5% Compensation payments due to passenger claims and court verdicts interpreting EU regulations also have a negative impact on others Technical cost increased due to fleet restructuring measures TOTAL OPERATING EXPENSES ,2% Depreciation ,8% Depreciation grew due to exceptional write offs 19

20 Fleet development Number of aircraft Total number of aircraft A320 family A330 family B737 family E190 Q year end Q1/13 Q2/13 Q3/ e 20

21 Preliminary balance sheet structure [EURm] B/S as of September 30 th, ) B/S as of September 30 th, ,191 2,208 Equity 0% Equity Fixed assets 53% Fixed assets 54% Other current assets 37% 101% Debt Other current assets 32% 100% Debt Liquid assets 10% -1% Liquid assets 14% Net debt: 853 Net debt: 812 1) Q restated 21

22 Hedging result on fuel and USD Hedging profile 1) [%] Price/ FX Rate development 2013/14 Hedge %-age: USD [USD/EUR] Sep Oct Nov Dec 1.28 Sep Oct Nov Dec Hedging rate 2013/14 (as of 29 Oct 2013) Current hedge price/rate 2013/ /14 Hedge %-age: 100 Hedging rate 2012/13 (as of 01 Nov 2012) ,040 Market/Forward rate Hedge rate 2012/13 Fuel [USD/t] ,020 1,000 0 Sep Oct Nov Dec 0 Sep Oct Nov Dec 1) as of 29 Oct 2013 I as of 01 Nov 2012; excl. differentials 22

23 Air Berlin PLC: Shareholder structure as of 30 September 2013 Shareholder structure by voting rights Shareholder structure by nationality Shareholder structure by EU and non-eu countries Etihad Airways % ESAS Holding A.S % Hans-Joachim Knieps 5.48 % Free float according to the Standards of the Deutsche Börse % Germany % United Arab Emirates % Turkey % Liechtenstein 2.35 % Norway 1.17 % USA 0.46 % EU countries % Non-EU countries % Other EU Member States / EEA 1.35 % Other 1.58 % 23

24 Agenda A. Key investment highlights 3 B. Financial overview 15 C. Conclusion 25 24

25 Summary investment highlights Sustainable and competitive business model Strategic partnerships Top 2 position within core DACH market, benefiting from positive outlook for DACH market Adapting business focus and growing in certain segments Traffic on key routes expected Strategic partnership with Etihad Airways and other codeshare increases airberlin s exposure to international markets Has taken market share from competitors Improved cost structure + Increase in profitability Successful implementation of Shape & Size program has delivered improved operational performance Current Turbine program is on-track and set to deliver approx. EUR400m of EBIT improvement by 2014 Financial structure Liquidity improved through the issued convertible bond and good booking intakes Equity ratio target of 15-20% by mid term Deleveraging is the key objective; initiatives are on the way and 7 aircraft have already been sold after the reporting period New target for net debt is being set at around EUR 650m towards year end